Minorco Lifts Bid for Gold Fields

By STEVE LOHR, Special to the New York Times

Published: February 21, 1989

LONDON, Feb. 20—
The overseas investment arm of South Africa's Anglo American and De Beers group today began a new, record-setting bid for Consolidated Gold Fields P.L.C. of Britain that values the company at $5.65 billion.

Consolidated Gold immediately rejected the bid by the Luxembourg-based investment company, the Minerals and Resources Corporation, or Minorco. Consolidated's chairman, Rudolph Agnew, told shareholders in a statement that the sweetened offer was still an effort to buy the company ''on the cheap.''

The Minorco bid for Consolidated Gold, if successful, would produce the largest takeover in British history. Renewed Assault

Minorco's renewed assault on Consolidated Gold is the latest step in a bitter takeover battle that began last September, when the overseas arm of the gold and diamond interests controlled by Harry F. Oppenheimer first went after Consolidated Gold, with a bid valuing the London-based company at $4.9 billion.

The unfriendly offer brought government investigations and court filings in several nations, which were concerned by the possible reduction of competition in gold and strategic metals markets if Consolidated Gold's sizable mining interests were acquired by Minorco.

Moreover, the bid created a political stir in countries where Consolidated Gold has operations, including the United States, Britain, Australia and Papua New Guinea, as anti-apartheid advocates and government officials expressed concern about having a major international mining corporation bought by an investment company widely viewed as being in South African hands.

But in recent weeks, crucial regulatory obstacles to Minorco's drive have been removed. On Feb. 2 the British Government freed Minorco to proceed with a new bid, after determining that the proposed takeover would not restrict competition in the markets for some high-value metals, especially titanium and zircon. And on Friday the European Commission confirmed that it would not block the takeover attempt, as long as Minorco honored its pledge to sell Consolidated Gold's platinum holdings and the sale was not to ''Anglo American Corporation of South Africa, De Beers Consolidated Mines Ltd. or cartels associated with them.'' 'Cleared All the Hurdles'

''We have now cleared all the United Kingdom and European regulatory hurdles,'' said Sir Michael Edwardes, Minorco's chief executive.

But one important hurdle remains: a preliminary injunction issued Oct. 25 by the Federal District Court in New York preventing Minorco from buying any more Consolidated Gold shares. Minorco already holds 29.6 percent of the British company. The New York court based its decision on the view that ''the public at large faces imminent harm from the takeover's effect in decreasing competition in the world gold market.''

Many metals analysts question whether Minorco's proposed acquisition of Consolidated Gold would dampen competition in the international gold market and drive up prices. They point out that the gold market is different from diamonds, where De Beers produces only a small share of global supply but controls the marketing of more than 80 percent of the world's gem diamonds through its London-based Central Selling Organization.

The temporary injunction is being challenged before a United States appeals court, but lawyers representing both companies say they do not know when the court will rule. To Sell Newmont Stake

To reduce any anticompetitive effects, Minorco said after making its first offer in September that if successful it plans to sell Consolidated Gold's 49 percent stake in the Newmont Mining Corporation of the United States, as well as Consolidated's holding in Gold Fields of South Africa, Renison Goldfields Consolidated and all the London company's other South African interests.

But with the temporary injunction in place, Minorco's new bid is conditioned on the outcome of the legal appeal in the United States. Minorco has 28 days from today to present its tender offer documents to shareholders, and the company clearly hopes that the appeal decision comes within that time and that it is favorable. A Minorco adviser declined to speculate on what the company's position will be if the appeals court upholds the restraint order.

The new Minorco bid represents a 10 percent increase over its previous offer. Consolidated Gold's shareholders are being offered $:14, or $24.86, a share. Of that, $:10.25 is in cash, with the rest in Minorco shares.

Although British institutional investors would generally prefer an all-cash offer, the share component of the deal is instrumental in bringing the Anglo American-De Beers holding in Minorco down to 40 percent from 60.1 percent, a shift that supports Minorco's claim that it is becoming an operating company and is no longer under South African control. Trading Above $:14

Today, Consolidated Gold's shares traded above $:14 a share. That compares with a closing price of $:10.85 the day before Minorco made its first bid last September. Most analysts expect that Minorco will have to raise its offer to more than $:15, or $26.64, to take over Consolidated.

Under British regulations, Minorco had to begin a new bid by Feb. 23, within 21 days of the Government's ruling to allow it to proceed with a new bid. Otherwise, according to British takeover rules, Minorco would have had to wait until October before it could make a new offer.

''This certainly shows everyone that Minorco is serious about getting Consolidated Gold,'' said Michael Coulson, an analyst for Kitcat & Aitken, a London brokerage house.